NEW YORK: Wall Street stocks fell again on Wednesday (May 24) on rising anxiety over US debt ceiling talks as a critical deadline nears without an agreement.
President Joe Biden offered to freeze government spending at current levels, a move that would reduce the deficit by US$1 trillion (RM4.59 trillion) and marks a concession to congressional Republicans.
The US government could run out of money to pay for its existing obligations as early as June 1, according to Treasury Secretary Janet Yellen.
“Everyone has seen this movie before and now we are finally starting to see some market stress as debt-ceiling talks remain at an impasse,” said Oanda’s Edward Moya.
The Dow Jones Industrial Average fell 255.59 points, or 0.77%, to 32,799.92, the S&P 500 lost 30.34 points, or 0.73%, to 4,115.24 and the Nasdaq Composite dropped 76.08 points, or 0.61%, to 12,484.16.
“Up until yesterday, investors have been very optimistic around the US debt ceiling resolution,” said Angelo Kourkafas, senior investment strategist at Edward Jones. “But now as we get closer ... to the June 1st X-date, we are seeing some caution again.”
Minutes from the latest Federal Reserve (Fed) meeting showed economists at the central bank still expected a “mild recession” earlier this month.
“Real GDP (gross domestic product) was projected to decelerate over the next two quarters before declining modestly in both the fourth quarter of this year and the first quarter of next year,” according to the Fed.
Among individual companies, Citigroup rose 1.3% as it announced a plan to spin off its Mexican consumer banking unit Banamex in a public offering. – AFP, Reuters
